The Danish producer of wind turbines, Vestas, Tuesday announced the sacking of 3,000 of its workers, more than one-eighth of its workforce.
The large cut in jobs was announced together with the presentation of Vestas' quarterly report. The report showed that Vestas is doing better in the third quarter of 2010 than previously expected and that the annual revenue will remain unchanged at 6 billion euros in 2010.
According to Vestas' website, the company has production facilities in more than 12 countries. In China, Vestas has a head office in Beijing and several factories in the Chinese city of Tianjin as well as factories in Hohhot and a foundry in Xuzhou.
The downsizing is most likely to hit Vestas' home country of Denmark, according to Vestas' quarterly report. The report said that the Danish operations will be hit hardest because of the huge costs associated with production in Denmark.
The report did not say whether or not there would be any downsizing in China, though the report did say that some administrative functions at international locations would be affected.
Vestas' share lost more than 10 percent of its value on the Copenhagen stock exchange Tuesday.
Vestas' CEO, Ditlev Engel, defended the layoff plan, saying the job cuts are necessary to improve efficiency.
"This only has to do with one thing, competitiveness," said Engel at a press conference following the release of the Q3 report. Engel added that the company's job composition must be balanced according to which regions gets the orders.
"More than 99 percent of Vestas' products are sold outside Denmark," said Engel.
Last year, Vestas, the world's leading wind power equipment manufacturer, increased its investment in China to more than 3 billion yuan (439 million U.S. dollars). The Danish company inaugurated several facilities for wind turbine manufacturing in TEDA, the Tianjin Economic Development Area.
The largest market for Vestas in 2010 has been the American market followed by the Chinese market. Earlier this month, Vestas announced that Sacramento Municipal Utility District in California bought 55 turbines totaling 128 megawatt from the company.
